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August 07, 2014

Why is the western media not all over this? Where is CNN when you need them?

Ukraine's Security Service: Russian terrorists and militants planned a cynical terrorist attack against an Aeroflot civil aircraft (...Shot down Malaysian Flight MH17 instead)Valentyn Nalyvaychenko, Ukraine's Security Service Head: During the investigation of Malaysia Airlines Boeing-777 downing the law enforcement and intelligence bodies established that terrorists and militants have cynically planned the terrorist attack against Aeroflot civil aircraft, AFL-2074 Moscow-Larnaca, which was flying over the territory of Ukraine at that moment.

The Current Information Warfare (called Reflexive Control) used by Russia against Ukraine today

Distraction, by creating a real or imaginary threat to one of the enemy’s most vital locations (flanks, rear, etc.) during the preparatory stages of combat operations, thereby forcing him to reconsider the wisdom of his decisions to operate along this or that axis;

• Russian troops at the Ukrainian boarder

Strategic missile tests

Overload, by frequently sending the enemy a large amount of conflicting information;

• Russian spies in all levels of the Ukrainian government

• Russia Today TV and all Russian mass media outlets

Paralysis, by creating the perception of a specific threat to a vital interest or weak spot;

• Diversions in Lviv, Zakarpatia and on Maidan in Kyiv

Exhaustion, by compelling the enemy to carry out useless operations, thereby entering combat with reduced resources;

• Multiple small skirmishes and checkpoint controls in Luhansk and Donetsk

Deception, by forcing the enemy to reallocate forces to a threatened region during the preparatory stages of combat operations;

• Multiple small skirmishes and checkpoint controls in Luhansk and Donetsk

Division, by convincing the enemy that he must operate in opposition to coalition interests;

• Invasion of Crimea and passive army resistance

Pacification, by leading the enemy to believe that pre-planned operational training is occurring rather than offensive preparations, thus reducing his vigilance;

• Countless Russian training maneuvers at or near the Ukrainian boarder

Deterrence, by creating the perception of insurmountable superiority;

• Infographics on FB and the internet about the hardware superiority of the RF army vs the Ukrainian army

Provocation, by forcing him into taking action advantageous to your side;

• Many existing Ukrainian Parliamentary MP get bribes from Russia to allow contraband, narcotics and weapons to cross from Russia into Ukraine unimpeded

Overload, by dispatching an excessively large number of messages to the enemy during the preparatory period;

• Russian mass media

Suggestion, by offering information that affects the enemy legally, morally, ideologically, or in other areas;

• The Kremlin is trying to scare the EU with response sanctions: “This is just like war”

and

Pressure, by offering information that discredits the government in the eyes of its population.

• Russia Today and all Russian media outlets.

Local Oblast and village politicians and business owners get bribed by Russia to tow the Russian line.

We can play the Reflexive Control game in the West to topple Putin too. How?

I can think of at least a dozen tactics. Here is just one example that is starting to be put into play:

Imposing sanctions is the right strategy; what we haven’t got right is the objective of these sanctions-which should be to get the Russian Oligarchs who’ve been keeping Putin in power, or tolerating Putin in power, to throw the knockout punch against him.

Herbert E. Meyer, who served during the Reagan Administration as Special Assistant to the Director of Central Intelligence –William (Bill) Casey and Vice Chairman of the CIA's National Intelligence Council concludes: “That’s why the sanctions will work if Obama and his European counterparts will keep tightening the screws; if they keep making commerce more difficult for Russia’s serious business executives, for instance by blocking their access to capital, and if they keep making life more miserable for Russia’s playboy oligarchs, for instance by canceling their credit cards and denying landing rights to their private jets.” (cancelling boarding school privileges in the U.K. for about 4,000 Russian students from rich families or denying Oligarchs their yacht mooring privileges in London or the Riviera-disaster !!-WD}.

The West must send one clear message: Obama, Harper and European leaders must keep telling the Russians -- bluntly and publicly -- that all this will end the moment Vladimir Putin leaves the Kremlin for good.

April 25, 2014

[I went to hear Edward Lucas last night in Toronto, here is one link he passed on to me during an interview I had with him—One question I asked him was: Could Ukraine have responded any other way to the situation in Crimea….the report below concludes NO--Walter Derzko]

How Russia captured Crimea so quickly and Why Ukraine and NATO are paralyzed

"Instead of relying on a mass deployment of tanks and artillery, the Crimean campaign deployed less than 10,000 assault troops – mostly naval infantry, already stationed in Crimea, backed by a few battalionsof airborne troops and Spetsnaz commandos – against 16,000 Ukrainian military personnel.

Figure 1Changes in the Character of Armed Conflict According to General ValeryGerasimov, Chief of the Russian General Staff

Traditional Military Methods - Military action starts after strategic deployment(Declaration of War).- Frontal clashes between large units consisting mostlyof ground units.- Defeat of manpower, firepower, taking control ofregions and borders to gain territorial control.- Destruction of economic power and territorial annexation.- Combat operations on land, air and sea.- Management of troops by rigid hierarchy and governance.

New Military Methods- Military action starts by groups of troops duringpeacetime (war is not declared at all).- Non-contact clashes between highly maneuverableinterspecific fighting groups.- Annihilation of the enemy’s military and economicpower by short-time precise strikes in strategic militaryand civilian infrastructure.- Massive use of high-precision weapons and specialoperations, robotics, and weapons that use new physicalprinciples (direct-energy weapons – lasers,shortwave radiation, etc).- Use of armed civilians (4 civilians to 1 military).- Simultaneous strike on the enemy’s units and facilitiesin all of the territory.- Simultaneous battle on land, air, sea, and in theinformational space.- Use of asymmetric and indirect methods.- Management of troops in a unified informationalsphere

This is what Russian military thinkers call “New Generation Warfare”.As a result, it follows that the main guidelines for developing Russian military capabilities by 2020 are:8i. From direct destruction to direct influence;ii. from direct annihilation of the opponent to its inner decay;iii. from a war with weapons and technology to a culture war;iv. from a war with conventional forces to specially prepared forces and commercial irregulargroupings;v. from the traditional (3D) battleground to information/psychological warfare and war ofperceptions;vi. from direct clash to contactless war;vii. from a superficial and compartmented war to a total war, including the enemy’s internalside and base;viii. from war in the physical environment to a war in the human consciousness and in cyberspace;ix. from symmetric to asymmetric warfare by a combination of political, economic, information,technological, and ecological campaigns;x. From war in a defined period of time to a state of permanent war as the natural condition in national life.Thus, the Russian view of modern warfare is based on the idea that the main battlespace is the mind and, as a result, new-generation wars are to be dominated by information and psychological warfare, in order to achieve superiority in troops and weapons control, morally and psychologically depressing the enemy’s armed forces personnel and civil population.

The phases of new-generation war can be schematized as (Tchekinov & Bogdanov,2013, pp. 15-22):First Phase: non-military asymmetric warfare (encompassing information, moral, psychological, ideological, diplomatic, and economic measures as part of a plan to establish a favorablepolitical, economic, and military setup).Second Phase: special operations to mislead political and military leaders by coordinatedmeasures carried out by diplomatic channels, media, and top government and military agenciesby leaking false data, orders, directives, and instructions.Third Phase: intimidation, deceiving, and bribing government and military officers, with theobjective of making them abandon their service duties.Fourth Phase: destabilizing propaganda to increase discontent among the population,boosted by the arrival of Russian bands of militants, escalating subversion.Fifth Phase: establishment of no-fly zones over the country to be attacked, imposition ofblockades, and extensive use of private military companies in close cooperation with armedopposition units.Sixth Phase: commencement of military action, immediately preceded by large-scale reconnaissanceand subversive missions. All types, forms, methods, and forces, including specialoperations forces, space, radio, radio engineering, electronic, diplomatic, and secret serviceintelligence, and industrial espionage.Seventh Phase: combination of targeted information operation, electronic warfare operation, aerospace operation, continuous airforce harassment, combined with the use of highprecision weapons launched from various platforms (long-range artillery, and weapons based on new physical principles, including microwaves, radiation, non-lethal biological weapons).Eighth Phase: roll over the remaining points of resistance and destroy surviving enemy units by special operations conducted by reconnaissance units to spot which enemy units have survived and transmit their coordinates to the attacker's missile and artillery units; fire barrages to annihilate the defender's resisting army units by effective advanced weapons; airdrop operations to surround points of resistance; and territory mopping-up operations byground troops.In other words, the Russians have placed the idea of influence at the very center of their operational planning and used all possible levers to achieve this: skillful internal communications; deception operations; psychological operations and well-constructed external communications. Crucially, they have demonstrated an innate understanding of the three key target audiences and their probably behavior: the Russian speaking majority in Crimea; theUkrainian government; the international community, specifically NATO and the EU. Armedwith this information they knew what to do, when and what the outcomes were likely to be, demonstrating that that the ancient Soviet art of reflexive control is alive and well in the Kremlin.This is very relevant to understanding its strategic significance, since it is the operationalization of a new form of warfare that cannot be characterized as a military campaign in the classic sense of the term.

April 22, 2014

Putin is in a panic over NATO encroachment and encirclement of the Russian Federation. He also knows that the Russian Federation is quickly losing its geopolitical and energy influence. Putin admitted that Russia invaded /annexed Crimea out of shear necessity and outright survival. If it didn’t then NATO would eventually accept Ukraine, stationing troops in Sevastopil. In his annual TV phone in show, Putin conceded that Russia is no match for NATO. Putin explains: “[ ] if NATO troops walk in, they will immediately deploy these forces there. Such a move would be geopolitically sensitive for us because, Russia would be practically ousted from the Black Sea area. We’d be left with just a small coastline of 450 or 600km, and that’s it!” Putin adds: “I’ll use this opportunity to say a few words about our talks on missile defense. This issue is no less, and probably even more important, than NATO’s eastward expansion. Incidentally, our decision on Crimea was partially prompted by this. If we don’t do anything, Ukraine will be drawn into NATO sometime in the future. We’ll be told: “This doesn’t concern you,” and NATO ships will dock in Sevastopil, the city of Russia’s naval glory.”

“Although some two-thirds of Russians currently support Putin, that number could drop precipitously if body bags arrive in Moscow and the stagnant Russian economy creaks under the burden of military adventurism.” concludes Alexander Motyl.

The collapse of the Russian Federation has been regularly predicted by numerous Russian analysts and ministers since 2008. This also includes westerners such Zbigniew Brzezinski and Edward Lucas from the Economist magazine. Zbigniew Brzezinski had a pivotal role in anticipating and helping bring about the economic downfall of the USSR. In 2011, former Russian Finance Minister Aleksei Kudrin said: “Russia cannot afford to run budget deficits on the current level of oil prices, which is certain to nose-dive with the inevitable bursting of the bubble.” Further energy sanctions and the release of surplus American, Iranian or Saudi oil could see energy prices collapsing to half of today’s levels, threatening Russia’s very survival as a state entity.

Added to economic woes, wars and occupations are fairly expensive undertakings, especially for nations with declining energy reserves and declining export-generated cash (with the EU diversifying its energy suppliers). How much is all of this aggression costing Putin? There appears to be some 15,000 Russian troops along Ukraine’s borders and over 22,000 in Crimea out of 750,000 in total. Oleh Soskin recently stated on Espreso TV that Putin has spent a minimum of $700 Billion US dollars (an unbelievable and staggering amount) to launch the war against Ukraine, although he didn’t mention the source. (see http://bit.ly/1gNmREN ). Compare this amount to Russia’s Sovereign Wealth Fund, which has dropped to under $500 Billion. No doubt, part of this war effort may have been financed by western banks, just like in World War II.

This leads to only 2 possible scenarios; either Putin succeeds and the Russian empire is enlarged (to include all or part of Ukraine, the Baltics and Eastern Europe as a buffer to NATO and resulting frozen conflict zone ) or the Russian Federation collapses from insolvency, into 21 independent nations and a “smaller, tiny” Russia.

What are the economic costs of Crimean annexation so far? Apart from almost universal global isolation and a growing list of economic sanctions, the Russian economy is quickly stagnating. According to Oleh Soskin, Russia has lost $30 billion in gold reserves to prop up the Ruble. In addition, in the last several months, the Russian stock market has lost over 20%, the Ruble has depreciated by over 15%; Russia witnessed $150 Billion in net capital outflow; foreign direct investment (FDI) has dropped to almost zero; Russian exports have collapsed resulting a budget deficit of 400 billion Rubles for 2104 and GDP growth will likely be zero if not negative in 2014. Added to Crimea, if Russia takes over South-Eastern Ukraine, the Russian budget deficit will increase by 45% if not more. Further credit agency rating downgrades will cost Russia billions in added borrowing costs.

So my takeaway from this is straightforward.

If the Russian army is 10 time bigger then Ukraine’s armed forces, and it costs orders of magnitude more to run, supply and sustain the Russian army, the aggression, the bribes to locals and the provocateurs, then the only way to win is to force Russia to purposely burn money by delaying aggression, violence and needless deaths in a prolonged stalemate, since Russia is unlikely to back down now. So far, this aggression has been relatively restrained and violence-free compared to other conflicts such as Afghanistan or Bosnia. So consequently, if Ukraine keeps the conflict to a "low simmer" like it is doing now and spends a minimum amount of military effort on encounters with little green men, (ie choosing its strategic battles wisely), then each passing week, Russia is forced to waste billions of dollars propping up the aggression-or winning through attrition.

So theoretically, Putin's megalomaniac military ambitions could soon collapse the Russian Federation (just like the we saw with the USSR and a decade of artificially low oil prices). The West could speed up the collapse scenario by immediately announcing more severe economic sanctions (banking, energy, arms, insurance, and other targeted industry sanctions, credit agency downgrades, export /trade embargoes etc.) against Russia for not de-escalating of the conflict in Eastern Ukraine as signed in the Geneva agreements.

January 23, 2012

By Leonard Liggio

Foreign Policy magazine (January-February 2012) lists Zbigniew Brzezinski among the five most important living influences on US foreign policy. In the weekend Financial Times (January 14-15, 2012), Edward Luce (FT’s chief US commentator) describes his recent luncheon interview with the former National Security Advisor under President Jimmy Carter and current trustee of the Center for Strategic and International Studies. After 1981, he continued in Washington as a professor at Georgetown University. Over his Dubonnet, he begins with his disappointment with President Barak Obama: “I’m all in favor of grand important speeches but the president then has to link his sermons to a strategy.” Although he has voted for Republican presidential candidates (such as George H. W. Bush in 1988) he is highly doubtful of the current Republican candidates. Compared to how well informed about the world he considers Chinese leaders: “And then you watch one of our Republican presidential debates …. The GOP field is just embarrassing.”

Brzezinski is 83 years old and was born in Warsaw. His father was a diplomat and Brzezinski spent his first three years in Paris and the next three in Berlin. His father was assigned to the embassy in Canada, so the family remained there when World War II began. He attributes his skills to attending Loyola High School in Montreal. (My graduate professor at Fordham University, Oskar Halecki (who had been secretary of the Polish delegation at the Versailles conference and then dean of Warsaw University) was a visiting professor at Grenoble University when the war began and was fortunate to move to Laval University in Quebec before the invasion of France.)

I first became aware of Brzezinski when I was working for the William Volker Fund assigned to read journal articles or books that might relate to its scholarly program. I extensively reviewed a book of Brzezinski written (c. 1961) (when he was at Harvard University) on the economic system of the Soviet Bloc. I recommended the book as knowledgeable and insightful.

He was appointed a professor of international relations at Columbia University. He became an advisor to Hubert Humphrey’s vice-presidential campaign and defended Lyndon B. Johnson’s war in Vietnam on the basis of the ‘Falling Dominos’ theory (if South Vietnam came under the Viet Cong, then Thailand, Malaya, Indonesia would become Communist.) (That theory arose in the 1950s: that Japan would want to trade with Red China if communists blocked Japan’s markets in Southeast Asia. Japan was trading with China through third countries, so the theory was questionable.)

Brzezinski opposed Republican senators critical of Johnson’s war. Senators Sterling Morton of Kentucky and Mark Hatfield of Oregon led the revival of the Republican party with over forty new Republican congressmen in 1966.

To him, today’s America appears to lack education in world politics. He sees a US failure in history and geography (French education always twined geography and history). “Americans don’t learn about the world, they don’t study world history, other than American history in a very one-sided fashion, and they don’t study geography. In that context of widespread ignorance, the ongoing and deliberately fanned fear about the outside world, which is connected with this grandiose war on jihadi terrorism, makes the American public extremely susceptible to extremist appeals.”

Fifty years ago when I began as a college instructor, there was a textbook which combined European and American history. However, as I was teaching fifteen hours a week the course in World Civilizations there was a dilemma. The chairman of the history and government department was a Viennese who had studied Japanese in the US army. He selected a textbook which went beyond European civilization to include: Hindu, Chinese, Japanese , etc. I had no background in those areas and told my five classes to ignore those chapters. American students have a hard enough time with European names, trying to have them or myself master exotic names was not education but chaos. I am reminded of one of my colleagues, a Chinese refugee from Red China, who upset his students of Chinese history when he later explained that the first seven dynasties they had struggled to learn were mythical.

Brzezinski considers America’s greatest national security threat to be the weak US economic situation, especially the political failure to address the government’s economic problems. His strategic advice: “the US should prod Europe to bring both Russia and Turkey into an enlarged west. America should hedge against China’s rise, without explicitly attempting to contain it. Most importantly, the US should revitalize its domestic economy if it wants to stave off further decline. On all counts, Brzezinski seems pessimistic about the likelihood that Washington’s elites will start to act strategically again.”

July 12, 2010

Military unit conscripts in Russian region not paid since January & military can't even pay phone bills.

Trends are made up of weak signals and emerging insights. Connecting these dots, and you may get a major driver or trend.

The military is Russia's key strategic resource, to which they will divert money from other social spheres to keep it running. This weak signal/insight that they can't afford to pay the phone bills and troops (both conscripts and officers) is a sign of a growing trend > pending soverign collapse. The last time we saw these similar circumstances was the the late 1980's, before the Russian soverign debt crisis in the old Soviet Union and before its ultimate collapse--Walter Derzko

Text of report by Russian newspaper Novaya Gazeta's website, often critical of the government, on 7 July

[Article by military commentator Vyacheslav Ismailov: "The Army and Poverty"]

For six months the servicemen of our Russian military unit have been living, serving, and working without receiving money

A letter has arrived at Novaya Gazeta addressed to me (the [return] address on the envelope is Vologda Oblast, Babayevskiy Rayon, postal department Zapolye, military unit 87256). The letter is from a group of army conscripts.

The soldiers complain that at the end of June they are to be discharged from the Army, but they have not received their monetary allowance since January. Moreover, the letter says: "We appealed to the courts and won our case, but no measures were taken."

The gist of the matter is: For six months the servicemen of our Russian military unit have been living, serving, and working without receiving money

I call the General Staff Organizational and Mobilizational Directorate - it is responsible for army conscription, and is even discussing in the Federal Assembly the question of extending the draft until August and increasing the call-up age to 30 years. That is to say, the situation with the draft is such that we do not have enough kids aged between 18 and 27, and if guys aged 30 join the Army, that will be just perfect.

[...]

I phone the Defence Ministry press service. The person on duty invites me to redial to the Main Directorate of Educational Work. I phone there. They tell me: "We do not handle this."

[...]

I phone Zapolye postal department, which is in Vologda Oblast's Babayevskiy Rayon. The local employee keeps no secrets from me: "We do have a military unit no.87256, but you will not be able to phone there, the unit has been completely cut off for nonpayment of telephone services. And the soldiers have indeed not been paid for six months."

The mail worker (the world is not without good people) gives me the mobile telephone number of one of the servicemen. The latter confirms: Conscripts were indeed discharged at the end of June, without having received a kopeck for the past six months, and officers are receiving only part of their monetary allowance.

All the officers whom I contacted one after the other confirmed: Discharged conscripted servicemen have simply not been paid their monetary allowance, and officers are receiving at best only half their monetary allowance. They went to court. They won their case, but nothing has changed.

Officers scraped together from their own empty pockets money for travel and food for the discharged soldiers.

I do not give the names of the officers with whom I spoke so as not to get them into trouble. As though things were not bad enough already...

July 06, 2010

When the global economy couldn't be pulled out of the Great Depression after a decade of backsliding in the 1930's, the world turned its attention to war and the military industrial economy/ war machine to drive the economy and productivity. Sewing plants were turned into uniform production. Auto plants started to manufacture tanks.

Is this the start of some new regional conflict or something more sinister and global? Why is Moscow going on full war alert or as they call it- "permanent-readiness". As a protest and countermove to planned American ABM in Poland or for some other reason?

[N.B. one analyst friend in Europe claims: "They are intended for internal use within the Russian Federation and its sphere of influence, should the states within the sphere call for help."--Walter Derzko]

Walter Derzko

All Russian air defence regiments are "permanent-readiness" units - says Russian general Maj-Gen Sergey Popov, head of the Russian Air Forces' Air Defence Troops, has said that all the regiments subordinated to him have been transformed into "permanent-readiness" units. Popov was speaking on Sergey Buntman's "Military Council" programme on Ekho Moskvy radio on 3 July.

"Absolutely all regiments have been made permanent-readiness category" units, meaning that they are on "alert duty" and can begin "the implementation of a combat task within an hour" of receiving their orders, he said.

Maj-Gen Sergey Popov, head of the Russian Air Forces' Air Defence Troops, has said that all the regiments subordinated to him have been transformed into "permanent-readiness" units. Popov was speaking on Sergey Buntman's "Military Council" programme on Ekho Moskvy radio on 3 July.

"Absolutely all regiments have been made permanent-readiness category" units, meaning that they are on "alert duty" and can begin "the implementation of a combat task within an hour" of receiving their orders, he said.

Popov also said that all the "first-ring" air defence regiments deployed around Moscow have been put on "alert duty" as part of the transition to new-look armed forces.

He said: "We have thus improved the efficiency from the point of view of [the speed of] reaction to enemy action. We can shift as quickly as possible to being ready to open fire. Planned replacement of systems with new ones is under way. S-400 is being supplied actively. Another regiment will get hardware in the near future, in a month or two. This process has become very routine. We shall be ready to receive hardware and deploy it for duty."

Discussing training he said: "This year, on the orders from the commander-in-chief and the head of the Main Staff of the Air Force, I drew up a directive and we obliged all regiments to fire on at least four targets entering their zone simultaneously, within no more than 60 seconds of each other."

He said that "all the units" did well during the spring training, with an "average efficiency of 82 per cent". Armavir MVU, Strizh, Kaban and Reys target missiles were used.

In addition, he said that Yaroslavl Air Defence College students shot down four Kaban target missiles in April.

In training, air defence troops simulate attacks similar to the bombings of Yugoslavia and Iraq, he said.

July 04, 2010

Russian Modernization -Truth or Deception? Trust or Hoax? Land of Opportunity or a sinking ship?

Russian president Dmitriy Medvedev is on a critical mission. Russia is in real economic trouble and the Russian president knows it.

Russia’s economic Achilles heel is oil and gas or more precisely, an economy that lacks any serious diversification to speak of. Besides Russian vodka and military arms, I can't think of any other Russian exports that are worldwide success stories.

To its detriment, it’s totally dependent on tax revenue from natural resources such as oil and gas. The Russian government has extended itself so much, that according to the Russian Ministry of Finance, it needs world oil prices to be at or above $100 per barrel for the next several years, just to break even and to start running a budget surplus again . Oil at $50 to $70 a barrel is a recipe for national bankruptcy, just like we saw when the Soviet Union fell apart twenty years ago.

The Soviet Union showed that it could not survive on $30 to $50 a barrel oil, which it appears was manipulated by un-named US government officials, according to the book: The Oil Card -Global Economic Warfare in the 21st Century By James R. Norman.

Russia needs to encourage investment in modernization, economic diversification and innovation from the West. It's hoping to clone the success of Silicon Valley by funding a similar project just outside of Moscow. That was the purpose of Medvedev’s trip to America just before the G8/G20 summits in Toronto. The Medvedev delegation was warmly greeted in Silicon Valley, by California governor Arnold Schwarzenegger , at Stanford University and in Washington by President Obama. In his press conference, Obama was quoted as wholeheartedly endorsing Medvedev’s plan.

Yet just two days later, this positive image of a trusted Russian partner was shattered by allegation that 11 Russian spies had been working behind the scenes for the past decade trying to influence US policy-making and high-ranking people. Not to be outdone, Ukraine announced its own spy scandal, a Russian national was arrested in Crimea and charged with spying for China.

But the big question/ strategic issue is: why should Western businesspeople risk investing in Russia, when ordinary Russians, as well as the Russian business elite don’t trust the integrity of their own system, ranging from government and judicial corruption to “corporate raiders” that in a hostile fashion, take over many successful western and Russian-owned business ventures One political analyst Stanislav Belkovskiy claims that the Russian elite intends to use "modernization" to embezzle funds (Ekho Moskvy Feb 1, 2010) “ […]… the Russian ruling elite does not intend to carry out any modernization, it intends to use the term exclusively for its own opportunistic purposes." Clarifying, he adds: "For the ruling elite of contemporary Russia, modernization is a way to withdraw billions of dollars from the budget for various projects of different degrees of adventurism and to embezzle these billions." An even more candid state of affairs is revealed in a recent survey conducted by the Swiss financial group UBS. They polled 25 Russian entrepreneurs -the business elite whose fortunes range between $100m and $500m dollars.

Looking forward, do these people have confidence in the Russian economy and in Medvedev’s modernization program?

The findings are quite disturbing.

•A significant part of Russia’s big business elite- the successful entrepreneurs have suitcases packed and are ready to leave, and change their place of residence, at any moment. Some businessmen even admit this in public.

•Rich Russians do not see their children's future in Russia.

•Many entrepreneurs have already left, establishing permanent residences in Europe. According to various estimates, between 300,000 and 400,000 Russian entrepreneur ex-pats now live in London England. They have practically stopped doing business. One can describe them as rich pensioners, living off their “estates”.

•Eighty-four per cent of big Russian businessmen keep their money in banks outside of Russia. Cyprus, Switzerland and the Virgin Islands seem to be the favorite trusted locations

Will Western modernization dollars go down a black hole, never to be seen again? Ordinary Russians seem to think so.

According to the results of an opinion poll conducted by Levada Centre in May 2010, most ordinary Russians have a rather negative perception of Russian businessmen. Fifty-one per cent of those polled believe that Russian businessmen are driven by greed, forty-nine per cent say that they are inclined towards all sorts of cheating and manipulation, forty per cent add that Russian businessmen are unscrupulous in their business dealings. According to twenty six per cent of the people polled, Russian businessmen do not want to work honestly.

According to the respondents, there are 10 times fewer honest and decent capitalists in Russia than in the West. And finally, only seven per cent believe that Russian businessmen can demonstrate generosity, honor and an inclination towards philanthropy.

Not a particularly convincing argument for western investment in Russian modernization.

March 24, 2010

I've been compiling a list of qualitative and quantitative foresight (prediction) methods and the total has passed over 50.

New Scientist magazine this week reviews one quantitative method called Bayesian Game Theory, in surprisingly quite an understandable fashion, that even a lay person like me can understand...well maybe not all the math details but the overall workings are quite clear.

They turn to Bruce Bueno de Mesquita, a professor of politics at New York University, who back in 1979 developed a game theory based prediction model, which he calls predictioneering. He says" I can predict events and decisions that involve negotiations, coercion (lies, bluffing, reneging on promises), cooperation or bullying." The model predicts what people will do in "strategic situations" where the outcome also depends on other people's decisions ie domestic politics, foreign policy, geopolitical conflicts, business decisions and social interactions.

New Scientist writes: "

"Over the past 30 years, Bueno de Mesquita has made thousands of predictions about hundreds of issues from geopolitics to personal problems. Overall, he claims, his hit rate is about 90 per cent. So how does he do it?

Examples: Terrorism & Climate Change

Terrorism:

"Bueno de Mesquita recently used it to make a prediction on the political situation in Pakistan. Working with a group of students, he asked how willing the Pakistani government would be to pursue Al-Qaida and Taliban militants in its territory, and how the US government could exert influence on their decision."

In January 2008 the students fed in data on all the players, including the US, Pakistan's then president Pervez Musharraf and other leading Pakistani politicans. Their assumption was that the US would offer foreign aid to persuade Pakistan's leaders to target the terrorists, and Pakistan would try to extract the maximum amount of aid possible from the US.

The model predicted that to get maximum cooperation from Pakistan, the US would need to donate at least $1.5 billion in 2009, double the projected 2008 figure. In return for this Pakistan would pursue the terrorists on a scale of 80 out of 100, but no more. In other words, the leadership would make considerable effort to reduce the terrorist threat but not to completely eliminate it. "The Pakistani government are no fools," explains Bueno de Mesquita. "They know that the money will dry up if Al-Qaida and the Taliban are destroyed. So they will rein the threat in and reduce it, but not utterly destroy it."

The outcome? According to Bueno de Mesquita, the US government authorised $1.5 billion in foreign aid to Pakistan in 2009, and the Pakistani leadership sustained pursuit of the militants at that level. "We have done very well," says Bueno de Mesquita.

Climate Change:

So what of the future? Another of Bueno de Mesquita's recent predictions addresses the future of climate change negotiations up to 2050. Depressingly, he predicts that although the world will negotiate tougher greenhouse gas reductions than in the Kyoto protocol, in practise these are likely to be abandoned as Brazil, India and China rise in power in relation to the European Union and the US."

See: The Man who sees the Future, New Scientist Volume 250 No 2752 March 20,2010, pg 42